The drought in Argentina, the world’s No. 3 exporter of corn and soybeans, has not ended a scenario of global oversupply left by years of bumper harvests driven by good weather and genetically engineered crops.

But combined with separate bouts of dryness threatening crops in U.S. Plains states and South Africa, losses in Argentina are eating into global reserves and prompting global buyers to accelerate purchases.

Farmers in the U.S. Midwest are scrambling to sell grain that has been held in storage for months to take advantage of prices rallying on Argentina’s struggles.

“You never wish a drought on another country but sometimes that’s what it takes,” said Illinois corn and soy grower Rob Schaffer, who is stepping up sales of crops to take advantage of climbing U.S. prices. “It’s basically been a gift.”

Thousands of miles away in the rural Argentine town of Chivilcoy, farmer Bernardo Romano has the opposite point of view. His soybean and corn plants stand at only half their typical height, starved of rain. Corn ears are 70 percent smaller than normal about a month before harvest is set to begin.

“This is going to have a very big impact on the regional economy,” he said, adding that farmers were praying for rain to mitigate more losses to late-planted crops.

Rains this growing season have only been a quarter of normal, Romano said. At most, he expects his soybeans to produce a third of their normal yield.

The Buenos Aires grains exchange cut three million tonnes off its soy forecast on Thursday, putting it about a quarter smaller than last year’s crop.

NICK OF TIME

Such losses ripple around the world because Argentina is also the world’s top supplier of soybean meal, used to feed livestock, and soy oil.

Soymeal and soybean futures contract prices on Friday reached their highest price since the summer of 2016, while corn futures touched an eight-month high.

The rally comes in the nick of time for U.S. farmers. As growers in the Midwestern Corn Belt prepare for spring planting, farm land rents are coming due. So, too, are bills for inputs, such as fertilizer and seeds which have remained stubbornly high.

Corn plants are seen in a drought-affected farm near Chivilcoy, Argentina February 28, 2018. REUTERS/Martin Acosta

U.S. farmers and traders are profiting from increased export demand, with global buyers shifting business away from Argentina. Over the past seven weeks, exporters have sold nearly 12.5 million tonnes of U.S. corn to foreign buyers, in the busiest stretch of sales in 23 years, according to U.S. Department of Agriculture data.

Merchants that make money buying, selling and processing harvests, such as Archer Daniels Midland Co, Bunge and Cargill Inc, have also benefited from higher margins.

On Friday, estimated U.S. profit margins for processing one bushel of soybeans into soymeal and soyoil reached more than $1.60 per bushel on the Chicago Board of Trade, a level seen only once before, four years ago. Margins have also improved in Brazil and Europe, allowing global processors to lock in profits.

Hedge funds have bought into the rally, placing the most bullish bets on CBOT soymeal prices ever. For the first time since August, there are also more speculative bets for higher prices in CBOT corn futures than there are for lower prices.

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WINNERS AND LOSERS

In Argentina, growers have slowed sales of soybeans, and crushing plants operated by companies such as Bunge have reduced operations, according to a crush manager for a major international soy processor. A Bunge spokeswoman declined to comment.

Argentina, which accounted for about 48 percent of total global shipments of soybean meal last year, is expected to import more soybeans from neighbour Paraguay than usual to make up for the losses, said the manager, who spoke on the condition on anonymity.

In other regions, South Africa, another corn exporter has declared a national disaster over drought. Dryness is also threatening wheat-growing areas in the central part of the United States.

The damage leaves grain markets more susceptible to swings driven by weather threats during the U.S. summer growing season, according to traders.

“A good part of the buffer the world had on beans has been lost,” Cargill told Reuters.

To be sure, global soybean ending inventories are still a record at 98 million metric tonnes, up 87 percent from 10 years ago, according to the U.S. Agriculture Department. The price rally could be short-lived and eventually worsen the supply glut as farmers are expected to plant more U.S. acres with soybeans this spring.

But U.S. chicken producers such as Sanderson Farms Inc and Pilgrim’s Pride Corp still face potentially higher feed costs, after benefiting for years from low grain prices.

Fiscal 2018 feed costs for Sanderson, the third biggest U.S. poultry producer, would have been more than $50 million higher than the previous year, if the company had priced all that it needs to buy last month, Chief Executive Joe Sanderson told analysts on an earnings call in February.

“Soymeal’s off and running,” he said, “because of Argentina.”

Reporting by Tom Polansek and Michael Hirtzer in Chicago and Maximiliano Rizzi in Chivilcoy, Argentina. Additional reporting by Karl Plume in Chicago; Editing by Caroline Stauffer